PFIZER REVERSAL ON CURBING COLD PILLS MAY

Just a year ago, Pfizer Inc. was leading the charge against state lawmakers who want to restrict sales of over-the-counter cold medications that contain pseudoephedrine (PSE), which can be used to manufacture the illegal stimulantmethamphetamine. Pfizer's Sudafed contains PSE and is one of the products that some states want kept behind pharmacists' counters and subject to sales limitations.

Now the drug maker has changed sides, a move that has helped boost the chances of bills pending in more than two dozen states and a proposed law in Congress, which is expected to hold hearings on the issue this month.

What caused Pfizer's change of heart? In January, the company rolled out a reformulated product, Sudafed PE, that contains no pseudoephedrine and thus can't be used to make meth. That makes it immune from existing or pending laws, and would give Sudafed PE valuable shelf space to itself. Other drug makers aren't likely to have substitute products on the market for several months at least.

The new Sudafed PE contains phenylephrine (PE), an ingredient contained in several cold formulations Pfizer has sold overseas for years. Pfizer is reformulating its entire Sudafed line and expects most of the products to be changed to PE by the end of the year.

MEDS AND METH Some states are restricting sales of cold medicines containing pseudoephedrine. Some that may be affected:

For years, lawmakers have been trying to shut down illegal labs in private homes and apartments that produce meth in quantities for personal use. But their efforts have been slowed or stymied by drug-industry lobbyists, who've argued that such laws would unnecessarily burden customers who use products with PSE as cold medicine, not as an ingredient for meth.

The toughest laws right now -- in Iowa and Oklahoma -- classify PSE as a controlled substance. That means products containing PSE, including Wyeth's Dimetapp Extentabs and Johnson & Johnson's Tylenol Cold & Flu must be sold behind the pharmacist's counter (although a prescription isn't needed).

Buyers are required to sign a registry and the amount they can purchase is limited -- to between 7.5 and 9 grams. (Nine grams is equivalent to about a dozen 24-pill packages of Sudafed tablets, for example.) Analysts say the laws pose a significant threat to sales in the $1.4 billion market for products containing PSE.

Pfizer is now pushing for more laws like Iowa's, which not only restricts sales of tablet forms of PSE, which are the easiest to use to make meth, but also the gel cap and liquid forms, along with combination products that contain PSE and other ingredients, like Schering-Plough Corp.'s Claritin-D.

Law-enforcement and government officials are pleased that Pfizer has joined their cause, but they also complain that the company helped to keep important laws from passing until it could benefit from them. "Pfizer's strategy in the war on meth seems self-serving, to say the least," says Will Pinkston, aide to Tennessee Gov. Phil Bredesen, adding that the company's bottom-line tactic "is striking a sour note with [people] who've been fighting the battle for years." Tennessee passed a law last month requiring products made with PSE (except liquid, gel or liquid-filled gel

capsules) be sold only in licensed pharmacies. Buyers also must present identification to complete a purchase.

"Pfizer last year was probably the largest opponent I had," says Marvin Van Haaften, director for the governor's Office of Drug Control Policy for the state of Iowa, which passed the country's toughest meth law in March after a year-and-a-half battle. "This year, Pfizer became a close friend of mine."

"I'd like to have more enemies like Pfizer," says Scott Rowland, general counsel of Oklahoma's narcotics bureau, who worked to get the first state law passed and has since advised other state officials. From March to December 2004, Oklahoma officials say the state's law has contributed to a decline in the number of new meth labs -- in that time, meth lab seizures were reduced by 80%.

In response to criticism that its position is self-serving, Pfizer spokesman Jay P. Kosminsky says, "We've done the right thing all along."

"As the issue has evolved, our position has evolved," he says, but it has stayed consistent on two issues: it believes classifying PSE as a controlled substance is wrong, and any laws restricting products with PSE should apply to all in the class, including tablets, liquid and gel capsules.

The company has "always been supportive of state efforts," contending that states need to balance consumer interests with keeping the product out of criminals' hands, Mr. Kosminsky says.

Pfizer worked for several years to develop a technology that would make it impossible for meth manufacturers to extract PSE from Sudafed products, says Mr. Kosminsky. But at the end of 2003, the company abandoned those attempts and turned to using phenylephrine, which the Food and Drug Administration says can be marketed in the U.S. without preapproval.

Schering-Plough sells cold medication containing PE and other ingredients known as "combination products" in Latin America and the Asia-Pacific region, but hasn't decided whether to do that in the U.S., a spokeswoman says. Johnson & Johnson says it is exploring reformulation alternatives. A Wyeth spokesman says, "We would have to see where this all goes before we decide to reformulate."

Such a window of opportunity could be very profitable for Pfizer. If Sudafed PE "is the only one on the shelf ... they're going to have a huge win," says Jonathan Asher, president of Dragon Rouge, a New York brand consulting firm.

Drug experts say the use of meth -- and the number of labs to produce the drug -- is rising across the country. In Oklahoma, seizures of meth labs rose from 125 in 1996 to 1,254 in 2002. During the same period in Iowa, seizures rose from 31 to 1,009. Children are present in many of these homegrown labs, law-enforcement officials say. Officials in Iowa says nearly 1,000 children have been removed from such homes since 2002.

The labs are also becoming a public-health and law-enforcement crisis, experts say. While most large-scale labs that produce the drug are in Mexico and California, most of the smaller labs are based in homes and apartments -- where mishaps cause explosions and the release of toxic materials. State hazardous waste-cleanup crews must respond to these scenes, and the bill is footed by taxpayers.